Monthly Archives: April 2016

S&P 500: Google can send indexes down

Fundamental grounds

US stock indexes do not feel very confident as to the absence of important macroeconomic statistics, market participants are beginning to believe that growth could turn out to be unnecessarily strong in the past few weeks. Negative adds Google and poor quarterly report, EPS which was 6.02 against the dollar, 6.3 dollar median forecasts.

We believe that in case of overcoming of important technical support levels in the index futures may be short-term interests for short positions.

Technical grounds

Deviation S & P 500 (ES) from the 50-day moving average is 3.0%. This is an area of high risk, which often begin correction. Sell in the case of overcoming the 200-hour moving average.

S&P 500 chart

S&P 500 chart

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

Whether oil will be able to grow after a meeting in Doha. Forecast for the week on April 18 – April 22

Week growth stock indexes finished. The most significant strengthening of the Japanese showed the Nikkei, which rose 5.51%, which was partly due to the depreciation of the yen against the dollar, as well as increased confidence in the fact that the Bank of Japan can go to expansion of economic incentives at the end of April. Positive statistics from China supported the Hong Kong HSI, who added 4.81%. Against the backdrop of the weakening euro increased German DAX 30. The benchmark added 4.66%. The US Dow Jones and NASDAQ rise by 1.81% and 1.48%, respectively. Their growth has been supported by more weak data on consumer price inflation in the United States. In annual terms, figure grew by only 0.9% against the forecast of growth by 1.2%. This price pressure dynamics gives reason to believe that the Fed still will not hurry with tightening.

Against the background of positive statistics from China showed growth of commodity currencies. AUD / USD has added 2,09%, NZD / USD rising 1.48%. It is said that the additional support received from the Aussie’s own macroeconomic statistics – came relatively strong labor market data. The unemployment rate fell to 5.7% vs. 5.9%, and the economy created 26.1 thousand jobs (forecast 20 thousand).

On commodity markets, Brent crude oil has shown impressive growth, rising to the level of 44.93, but on Friday on profit taking in the run-up to the Doha meeting at the weekend, has lost part of the earned. Quotes energy source for the week rose to 2.99%. Precious metals showed mixed trends. Gold (XAU / USD) ended the week in the level of 1233.44 dollars per ounce region, losing 0.87%. But Silver (XAG / USD) increased by 5.4%, rising to the highest level since June 2015 (16.314).

Chart of the week:

Silver chart

Silver chart

The economic data of the last week:

  • Monday. China: March, CPI -0,4%, + 2,3% vs. -0.3%, + 2.5%
  • Tuesday. United Kingdom: March, the CPI + 0.4%, + 0.5% vs. + 0.3%, + 0.4%
  • Wednesday. US March retail sales -0.3%, lower than the forecast of + 0.1%
  • Thursday. The Bank of England kept interest rates at 0.5% unanimously, although there were rumors that two MPC members tended to decrease
  • Friday. China. 1Q, 6.7% of GDP in line with the forecast of 6.7%

Forecast for the week on April 18 – April 22

Stock market

This week could be interesting for the German DAX 30 index (FDAX). Benchmark crept quite close to a fairly strong resistance he could not 10,150.0, above the rise since January this year, partly due to the depreciation of the pair EUR / USD. Technically, this level will break open the way up to the level of 10600.0. An additional incentive for the growth of the index can be a publication of the decision the European Central Bank’s monetary policy. Actually, not the publication itself, and the press conference of the European regulator.

Do not be amiss to recall that, as it became known from the minutes of the last meeting, when the European Central Bank expanded its asset purchase program to 80 billion euros, has lowered its key interest rate to 0, and to deposit 0.4%, during the discussion of options were considered, and more aggressive easing. So, if Mario Draghi will hint at the possibility of action in a similar direction in the near future, DAX can get additional support, as the possibility of additional stimulus is always a favorable impact on the dynamics of the stock of assets. In addition, hints of additional easing and may have additional pressure on the euro, which will also contribute to strengthening the position of the benchmark.

Commodity and raw market

Brent crude oil next week will move under the influence of the results of the meeting, which will take place on Sunday in Doha. Much will depend on what the decisions of the OPEC meeting in the format + delight. Most likely, no radical solutions, we still do not see. It will probably be agreed to freeze oil production at the level of January 2016 without the participation of Iran in this agreement. Such an outcome is widely expected, so the first reaction of the oil may be a reduction in the area of ​​the level 39.00 – 40.00 dollars a barrel amid profit taking. The fact that such an outcome would not result in a rapid reduction offers on the world market, and thus, imbalances will persist. In the future, though it is possible the resumption of growth in the area of ​​recent highs. Such an agreement will still be able to help the black gold to stabilize at relatively high levels (40, 00 – 45,00), and in the medium term up to around 50.00.

If Saudi Arabia decides not to join the agreement, taking into account the position of Iran, which plans to increase production volumes up to the levels of sanctions, of Brent and may be under pressure more impressive. Against this backdrop, prices could fall quite quickly to the level of 35.00. However, a deeper fall may not happen because a new wave of reduction of prices for black gold will contribute to the extrusion market companies engaged in oil shale extraction. But in this case, the resumption of growth appears to be a fairly distant prospect.

Currency market

Taking into account the fact that the Canadian economy as well as Russia, are quite dependent on oil prices, an interesting dynamic, and can show the pair USD / CAD in the coming week. Recall that about 30% of the budget of Canada is formed by the proceeds of oil and gas industry. Thus, after the output couple can demonstrate a fairly impressive growth on the back of lower oil prices after a meeting in Doha, of course, if she did not bring surprises. The primary goal of the movement can become a mark of 1.2970 with a further target at 1.3130. In addition, at the end of the week will attract attention and data on the index of consumer prices in Canada. If the index show growth, this will convince the market that in the short term, the Bank of Canada will not reduce the rate, as it did at a meeting last week. Coupled with forecasts increase control the rate of growth of the national economy up to 1.7%, it can give “Canadian” stimulus to the restoration of the lost positions.

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

Will the rise of oil? Forecast for the week on April 11 – April 15

Week stock indices ended in the red. The leader of the fall was again the Japanese Nikkei. The benchmark lost 2.47% largely in response to the strengthening of the Japanese yen, which this week reached a year and a half high. The US Dow Jones and NASDAQ lost 1.187% and 1.30%, respectively. Under pressure I turned and German DAX30, which lost 2.32%. Hong Kong’s HSI was down 0.78%. Even the fact that the US Federal Reserve meeting minutes reflected the regulator fears about the prospects for the world economy, which casts doubt on the June rate hike and no material support. That global risks at this stage are putting pressure on the indices.

USD / JPY pair has demonstrated an impressive fall. Quotes fell by 3.24%. The changing expectations of the Fed‘s monetary policy seems to be made and the Japanese regulator to change its principles. The only thing that the Bank of Japan did in response to the strengthening of the yen, which in general, negative for the export-oriented economy, said that following the course.

On commodity markets, Brent crude oil showed an impressive recovery. Quotes energy source rose 8.31%. Efforts concerns about the global economic outlook have allowed precious metals to demonstrate growth. Gold (XAU / USD) ended the week in the level of 1240.00 dollars per ounce region, adding 1.51%. Silver (XAG / USD) increased by 2.17%.

Chart of the week:

Brent crude oil chart

Brent crude oil chart

The economic data of the last week:

  • Monday. Eurozone: February level of 10.3% versus 10.4% – to 5-year low
  • Tuesday. Reserve Bank of Australia kept interest rates at 2%
  • Wednesday. China: March, PMI Caixin index in the service sector rose to 52.2 against 51.2 in February
  • Thursday. Minutes of the last meeting of the European Central Bank showed that the considered more significant reduction in the rate
  • Friday. UK: February, industrial production -0.3%, -0.5% vs. 0.1%, 0.0%

Forecast for the week on April 11 – April 15

Stock market

The upcoming trading week in terms of the planned to the publication of macroeconomic statistics is expected to be more interesting. Among US data worth paying attention to retail sales data, reports on consumer price inflation and industrial production. After the publication of the US Fed‘s March meeting minutes it became clear that the US regulator in a fairly high degree of concerned about the global threat. This means that the state of the national economy at this stage is not the only factor to be taken into account when deciding on the rate.

Therefore, if the published statistics would be strong enough, it is possible that the US indices will attempt to resume growth in the upbeat sentiment regarding the economic outlook States with immediate goals for the Dow Jones (YM) at 17800 and NASDAQ (NQ) at the level of 4550.0. But by the end of the week it will be published by a fairly large block of statistics from China, including data on the growth rate of China‘s economy in the 1st quarter. Signs that she continues to slow down, can provoke an impressive reduction of the stock of assets. Also, do not forget that next week will start the season the publication of corporate reports. And then, most likely, will not be without any unpleasant surprises. And it is also an additional reason for the sales. So maybe shopping rush is not worth to consider the rise of the index as a good opportunity to go short.

Commodity and raw market

Brent crude oil after last week renewed month low, falling to around 37.26, still managed to recover most of the losses. Positive attitude is supported by energy source, on the one hand, expectations that the meeting is still to be reached on the freezing production agreement in Doha on 17 April. On the probability of such an outcome hinted several members of OPEC, in the same vein, expressed and Minister of Energy of the Russian Federation. In addition, the market and were pleased about the fall of the commercial stocks in the US, as well as signs of further decline in production volumes in the United States.

On the part of the weekly EIA data, you can wait and support in the coming week as the holiday season begins in the United States, which traditionally increases demand for gasoline fuel and, therefore, the refinery start working at the limit of capacity. But at the same time, on Tuesday, it will be published monthly report on global supply and demand of energy carrier. If the imbalance of supply and demand show growth, of Brent could come under pressure, returning to the area of ​​the recent lows. While signs of its decline will be able to trigger testing the upper limit of the previously established range (42,50). But most likely, until the announcement of the results of the meeting the major oil-producing countries, oil will remain within the range of 37.00 – 42.50.

Quite an interesting dynamic in the coming week may show, and copper (HG). One of the world’s biggest consumers of red metal is China (which accounts for about 45%). During the five-day working Celestial publish many reports. Data on producer price index and consumer reports on the trade balance, retail sales, industrial production and the growth rate of the economy in the 1st quarter of 2016. Naturally, the data on GDP will be key. If China‘s economy will show signs of further cooling, copper can experience the pressure on fears of demand reduction. Especially because there was information about the readiness of China to increase exports of this metal by selling excess (about 1 million tons) of the current week. Thus, if copper exceeds the level of 2.0660, could be to reduce the level of 2.0090.

Currency market

This week attention is paid to the British pound. Firstly, to be published data on the index of consumer prices. If the index is lower than the March 0.3% in annual terms, it will be an additional indication that the Bank of England will be in for a longer period to keep monetary policy unchanged. About regulator also plans to become known in the next week, as will be issued on Thursday a decision on monetary policy. Much will depend on how the ratio of the votes will be for the rate increase and preserve it intact. If the decision is unanimous, the pound may also come under pressure, especially taking into account the fact that “Brekzita” risks remain. And completely eliminate this factor will only be possible after 23 June, when a referendum will be held. Coupled with a strong enough statistics, all of which can put pressure on the pair GBP / USD and send it to the district level 1.3900.

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.

Selling oil is not yet time. Forecast for the week on April 4 – April 8

Stock index did not show uniform dynamics concluded week. The US Dow Jones and the NASDAQ added 1.37% and 2.9%, respectively. The support they received from the macro-economic statistics, which reflected that the US economy is not cause much concern. Optimism, including provoked data on business activity in the manufacturing sector – an indicator moved in the growth zone (51.8 vs. 49.5 in February). German DAX30 lost 0.8%. Hong Kong HSI rose by 1.58%, which is partly due to the activity of public funds, which have stepped up purchases. But the Japanese Nikkei lost 3.66%, with most of the movement he passed on Friday after the publication of disappointing Tankan report.

The growth leaders escaped NZD / USD and AUD / USD, ending the week with a score of 3.28% and 2.27%, respectively. Most of the week the currency used by the weakness of the dollar, and on Friday got a reason for optimism in the data on business activity in the industrial sector of China. PMI Caixin showed a stronger-than-expected growth (49.7 vs. 48.2).

On commodity markets, Brent crude oil suffered losses after comments from the Prince of Saudi Arabia. By the end of the week energy carrier fell to 38.63 dollars per barrel, losing 4.43%. Precious metals did not show unambiguous dynamics. Gold (XAU / USD) finished the week at 1,222.08, adding 0.43% to the closing of the last week. Silver (XAG / USD) has lost 0.77%.

Chart of the week:

nasdaq chart

Nasdaq chart

The economic data of the last week:

  • Monday. US February net price index PCE + 0,1%, + 1,7% vs. 0.2%, + 1.7%
  • Tuesday. The Fed chief Janet Yellen gave a hint of a more prolonged period of loose monetary policy
  • Wednesday. Germany: March, CPI + 0,8%, + 0,3% higher than the forecast of + 0.6%, + 0.2%
  • Thursday. United Kingdom:. Q4 GDP revised to increase to 2.1% against 1.9% a preliminary assessment
  • Friday. US. March, the number of new jobs created outside the agricultural sector 215 thousand vs. 206 thousand.

Forecast for the week on April 4 – April 8

Stock market

The report on the US labor market is left behind. It should be noted that the data were mixed. Despite the increase in the number of new jobs above forecasts (215 thousand v. 206 ths.) And acceleration of wage growth (+ 0.3% on a monthly basis), marked increase in the unemployment rate in March, up 5% from 4.9% previously . After the first reaction in the form of reduction, since such data do not exclude the probability of a Fed rate benchmarks turned up and the NASDAQ reached a three-month high. And it shows that they are shifting their attention to the timing of possible tightening of monetary policy in the state of the economy. The published next week Fed meeting minutes also, most likely, will not bring anything new, but the market is already laid in the prices of the fact that in the current year should not expect only 2 rate increase. Amid signs of economic stability indices may still continue to grow with the objectives at levels 17,900 and 4600.0 on the Dow Jones (YM) and NASDAQ (NQ), respectively.

Recent statistics from Japan, to put it mildly, not pleased. Tankan report data indicate that the deterioration of sentiment in the business community of the country against the backdrop of the high appreciation of the yen, which has a negative impact on export-oriented companies. It seems that entrepreneurs do not believe in the efficacy of “abenomics“. Market indicators came out below expectations. large manufacturers sentiment index in the 1st quarter. was 6, compared to the previous 12 and forecast values ​​8. Forecast of business activity also came below expectations (3 to 6). index of business activity in the manufacturing sector (PMI) remains in the recession zone (49.1 in March). The fact that the issue of increasing the sales tax set aside in the “closet” is not very optimistic. The current situation in the consumer sector leaves much to be desired, as wages do not grow, limiting the activity of the population. If you still remember that negative interest rates are putting pressure on the banking sector, the situation is very grim. At the same time the Bank of Japan is not ready to take additional stimulus through monetary policy. All this opens the way for the Japanese Nikkei (NKD) down. Of course, the current relatively low levels to sell it a bit premature. But the upward correction may give good points for short positions with target at 15540.

Commodity and raw market

Brent crude oil continues to be held within the previously established range of 38.30 – 42.50. While energy carrier lacks catalysts to break one of its borders. Of course, a key factor supporting the market perceives the upcoming April 17 at the Doha meeting of representatives of major oil producing countries. The stakes are high enough and all meeting participants understand this. Consequently, the likelihood of reaching an agreement was high enough up until the last moment. As it became known on Friday, Saudi Prince Mohammed bin Salman said that they will go to freeze only if all countries agree to this step. Earlier, officials said the kingdom’s readiness for such a step, even despite the fact that Iran, with which only recently lifted sanctions will not join the agreement.

Prince said that “if someone decides to increase production, we also do not miss the opportunities that present themselves to us“. Therefore, the agreement is now uncertain. Of course, these fears are unlikely to cause a fall below 38 dollars per barrel, but they will not be allowed to grow quotations. An additional factor of pressure and made statements to the effect that Saudi Arabia plans to reduce its dependence on oil by creating a sovereign fund of $ 2 trillion dollars.

Thus, we can say that Brent during the next working week will be held within the former range of 38.30 – 42.50. The ability to move in the area of its upper boundary energy carrier can receive data from the US Energy Information Agency, provided that they reflect the reduction of commercial stocks and a further reduction in the volume of production in the country.

Currency market

This week a decision on the monetary policy of the Reserve Bank of Australia will announce. From that, how will the regulator’s decision and the tone of the accompanying statement will be able to depend on whether the pair AUD / USD to make an attempt to test recent highs at around 0.7722. Most likely, the answer is no. The fact that the March meeting of the Reserve Bank of Australia Minutes reflected concerns about the weakness of the Chinese economy – one of the key trading partners of Australia.

In addition, the regulator called the conditions for lowering rates – inflation low. Also worth noting is that the marked slowdown in wage growth over the past 8 quarters in the country that could have a negative impact on price pressures. Most likely, the next sitting of control rate not lower. However, it may well hold verbal intervention in the framework of the accompanying statement, aimed at reducing the current rate of the Aussie. Applications Reserve Bank of Australia to the effect that the prevailing exchange rate poses a threat to the economy, may already be enough to pair AUD / USD began to decline in the area of ​​0.7490 level.

Warning: Profitability in the past does not mean profitability in the future. Any projections are for information only and does not guarantee a result.